Unreported / Non-Citable
Background
John Silva Dias appealed the Commissioner of Social Security's denial of his application for benefits in the U.S. District Court for the Eastern District of California. After Dias filed a motion for summary judgment, the parties stipulated to a remand under 42 U.S.C. § 405(g) Sentence Four, and judgment was entered in his favor. His counsel, Francesco Benavides, was awarded $9,100 in fees under the Equal Access to Justice Act.
On remand, the agency determined Dias was disabled and entitled to past-due benefits of $156,189.00, with a maximum attorney fee of $39,047.20. Benavides then moved for an award of $29,800.00 under 42 U.S.C. § 406(b), noting that a different attorney who represented Dias at the administrative level had received or was expected to receive $9,200.00 under § 406(a), keeping the total fee within 25% of the past-due award. The Commissioner filed a response summarizing the applicable law but took no position on the merits.
The Court’s Holding
The court granted the fee motion, applying the framework of Gisbrecht v. Barnhart, which caps contingent fees at 25% of past-due benefits and requires courts to review contingency arrangements as an independent check to assure reasonable results. The court considered the character of the representation and the results achieved, as well as whether counsel engaged in substandard performance, dilatory conduct, or excessive delay, and whether the fee was excessively large in relation to the benefits received, citing Crawford v. Astrue.
The court found Dias was represented by experienced counsel who achieved a favorable result, with no indication of dilatory conduct or substandard performance. Counsel's itemized bill reflected 41.9 hours to review the administrative record and draft a motion for summary judgment, which the court deemed a reasonable expenditure. The effective hourly rate of $711.21 was within the upper limits of reasonableness, particularly compared to prior Eastern District awards approving rates exceeding $1,300 per hour. The court also concluded the award was not a windfall, noting that a comparatively high effective hourly rate is generally warranted to compensate for the risk assumed in Social Security representation, and that the total was consistent with similar § 406(b) awards.
The court ordered the Commissioner to certify a gross payment of $29,800.00 to Francesco Benavides and directed Benavides to refund the $9,100 EAJA fee directly to Dias, consistent with the contingent fee agreement's provision that EAJA fees would be refunded upon payment of the 25% contingency fee.
Key Takeaways
- A federal magistrate judge approved a $29,800 attorney fee under 42 U.S.C. § 406(b) after finding the effective hourly rate of $711.21 reasonable in light of the favorable outcome and comparable district awards.
- The court emphasized that the lodestar is merely a guidepost in § 406(b) cases and that higher effective hourly rates compensate counsel for the contingency risk inherent in Social Security representation.
- Counsel was required to refund the $9,100 EAJA fee to the claimant, preventing double recovery where the contingency fee was paid from past-due benefits.
- The total combined attorney fees, including a separate $9,200 administrative-level award under § 406(a), remained within the statutory 25% cap on past-due benefits.
- The Commissioner took no position on the fee motion, and the court conducted its independent reasonableness review under Gisbrecht and Crawford without opposition.
Why It Matters
This order illustrates how magistrate judges in the Eastern District of California apply the Gisbrecht and Crawford framework to § 406(b) fee petitions, treating effective hourly rates well above standard billing rates as reasonable when counsel secures a substantial past-due benefit award on a contingent basis. It confirms that courts will compare requested rates to prior district approvals, which in this district have exceeded $1,300 per hour.
The decision also demonstrates the mechanics of coordinating EAJA and § 406(b) awards: counsel may collect the larger contingency fee but must refund the EAJA payment to the claimant, ensuring the client receives the benefit of the fee-shifting statute while the attorney is compensated for the risk of contingent representation.